Proposed changes to Professional Employees Award will cost businesses

Variations are being made to the Professional Employees Award 2020 which will add further labour cost pressure to WA businesses.

The proposed changes by the Fair Work Commission (FWC) will significantly alter the operation and coverage of the Award, including to:

  1. Increase the number of employees covered:

Employees may be covered under the Award if they perform professional engineering or scientific duties; engaged in the IT industry, quality auditing or telecommunications. These duties include roles such as engineers, medical researchers and tech workers.

  1. Hours of employment:

The FWC has included a new definition of what constitutes ‘ordinary hours of work’ which are 38 hours-a-week as standard.

  1. Overtime entitlements and payments (for full-time, part-time and casual employees):

Overtime can be paid or be taken as time off and may be subject to the new overtime and penalty rates. The proposed clause allows employees to request their employer pay their overtime rather than take off time instead without loss of pay, if it is covered by an agreement between both parties. The period of time off that an employee would be entitled to take is the same as the number of overtime hours worked. There are also new proposed penalty rates as per the table below.

Employers also have new record keeping requirements regarding employees who work in excess of 38 ordinary hours a week. These record keeping requirements will also include when an employee works before 6am or after 10pm between Monday to Saturday; and anytime on Sunday and public holidays.

There is, however, an important exemption – employers can have the ability to contractually agree to pay an employee an annual salary of 25 per cent or more above minimum wage for the employee’s relevant classification. In doing so, the entitlements of overtime, time off instead of paid overtime, penalty rates and record keeping will not apply.

Proposed penalty rates. Source: Fair Work Commission

No final determination of the variations has been made yet. The FWC is currently accepting submissions on the proposed changes, which close today.

Impact on WA businesses

The proposed changes relating to salaries/wages will be of most benefit to entry-level employees, as high-level workers already have leverage due to the tight labour market to ask for higher salaries. As such, these variations will no doubt be felt by businesses which are already feeling the burden of high labour costs.

CCIWA’s Business Confidence Survey December 2022 reported 4 out of 5 (79%) businesses indicated they were struggling to fill a position during Q1 and Q2. As a result, 3 in 5 (59%) businesses said they were increasing existing employees’ base wages by an average 11%.

For employee advice and guidance, contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email [email protected].

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